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Banks, Brokerages Draw Ire of Angry Customers

Posted October. 11, 2008 06:08,   


Banks and brokerages have been inundated with angry phone calls from investors and loan customers with the plunge in the stock market, with certain clients reportedly preparing to file a class-action lawsuit for their losses.

Tellers and dealers at commercial banks are caught in panic. One employee at a brokerage committed suicide after stocks plunge.

About 50 mutual fund investors who purchased Woori Power Income Funds, a derivative product, held a protest at the headquarters of Woori Bank in downtown Seoul. They demanded that the bank take responsibility for what they called the irresponsible sale of a fund that caused them huge losses.

They said the bank advertised that the fund in question had almost no risk of losing principal and failed to fully inform investors about the risks. At the end of August, the funds recorded an accumulated return of minus 81.45.

One fund investor said, “I invested the money I saved to purchase an apartment but only 20 percent of the principal remains, leaving my family in dire straits. They introduced the funds as a safe investment like a deposit but are now busy making excuses.”

She said she and other investors created an Internet café for victims and will sue Woori.

A group of people who borrowed yen-denominated loans visited the Bank of Korea yesterday to urge rollovers considering the won’s fall against the Japanese currency.

A senior employee at a textile company in Pocheon, Gyeonggi Province, said, “I borrowed 4.7 billion won (3.66 million U.S. dollars) after a teller told me about a cheap interest rate in April 2006. The exchange rate then was 825 won per 100 yen but is now more than 1,300. My company faces bankruptcy.”

Amid the snowballing losses stemming from the stock plunge, an employee at a securities company committed suicide in despair.

Police said the 32- year-old man hanged himself at a motel Thursday.

The father of the deceased man said, “My son sold securities investment products and received a flood of complaints from customers who suffered huge losses in the wake of the sharp decline in stocks. A few days ago, he asked me to send him money to compensate his losses after he used customers’ funds to invest.”

As the news of his suicide spread, a worker at a securities company said, “More of my coworkers say they want to commit suicide these days in the face of many customers who lost 50 to 70 percent of their principal. I know how the deceased man must`ve felt.”

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